Strait of Hormuz Tensions Spike Tanker Trade: These 2 Stocks Are Set to Benefit

Key Points

• Tanker shipping companies operating VLCCs have benefited from the Iran war as elevated rates and rerouted voyages boost revenue despite lower overall shipping volumes.
• Frontline PLC reported 67% year-over-year revenue growth in fiscal Q1 2026, with more than 80% of its VLCC days already booked for the second quarter.
• DHT Holdings posted nearly 135% year-over-year revenue growth and maintains low debt, though its 14.75% dividend yield carries risk with a 124% payout ratio.

During the Iran war, the market’s most reliable winners haven’t been extractors or refiners. Instead, it's the companies that own the tankers setting the market pace, especially those operating Very Large Crude Carriers (VLCCs).

VLCCs each haul around 2 million barrels of crude oil per voyage. And, before the conflict began, more than 100 of them would transit the Strait of Hormuz on a normal day. But these are not normal days.

The day-to-day updates surrounding the war in Iran are enough to give even the steadiest investor a headache. If you haven’t been following the news closely, sit down, grab a glass of water (and maybe some Dramamine), and dive into the latest recap:

• July 8: President Trump cancels the ceasefire as the United States strikes 80 Iranian defense targets in response to claimed attacks on commercial shipping vessels.

• July 9: Iran claims attacks on U.S. bases in Bahrain, Kuwait, and Qatar.

• July 11: Iran claims the Strait of Hormuz is closed indefinitely.

• July 12: The United States strikes an additional 140 Iranian targets.

• July 13: President Trump reinitiates the U.S. blockade and proposes a 20% fee on cargo in exchange for safe passage on tankers transiting Hormuz.

• July 14: Trump cancels plans to impose 20% toll on Hormuz traffic.

• July 15: Trump considers expanding operations in Iran, including the seizure of Kharg Island.

Got all that? Good, there’s a quiz in 20 minutes before it changes again.

For most companies in the energy sector, relentless unpredictability is a recipe for underperformance. But rampant disruption is actually beneficial to shipping tanker companies that can charge higher rates when routes and timelines are uncertain. Rates are measured in tonne-miles, which is cargo multiplied by distance. Longer voyages increase the fees tankers charge clients, which is on top of a hefty war premium. Rates haven’t yet spiked to March levels, but are still elevated and back on the acceleration.

VLCCs can have breakevens as low as $15,000 per day, so elevated rates for extended periods are huge boosts to shipping company stocks, even if total volumes are much lower. Many Gulf ships have been rerouted around the Cape of Good Hope, causing rates to spike by 30% to 50% to offset longer voyages. And many of these companies are efficiently using higher rates to boost their bottom lines.

With the tanker trade back in full force, investors might want to consider this pair of stocks, each with a high-quality fleet and a potential catalyst on the horizon.

Frontline: Largest Fleet With an Array of Trading Routes

Frontline PLC NYSE: FRO operates the largest global shipping fleet with a variety of VLCCs, Aframax, and Suezmax vessels.

The company serves trading routes across the Middle East, Asia, the Americas, and Europe, and this strategic positioning enables it to be highly sensitive to rate-market volatility.

This was apparent in the company’s fiscal Q1 2026 earnings report, released late May, which showed revenue spiked 67% year-over-year (YOY).

More than 80% of its VLCC days were already booked for Q2 at the time of the release, and the Q2 report is scheduled for Aug. 31.

Support at the 50-day moving average has been strong for FRO shares throughout the conflict, although the stock remains stuck at the same price it was in March. But the 50-day continues to hold, and the Relative Strength Index (RSI) hints that upward momentum is brewing.

DHT Holdings: The Steady Compounder With Healthy Balance Sheet

Not only do the VLCCs owned by DHT Holdings Inc. NYSE: DHT have some of the lowest breakevens in the industry at around $15,000 per day, but the company itself has almost no debt (rare for a shipper) and pays a strong dividend.

Using a mix of spot and time charters, DHT transports crude oil barrels from the Gulf to refiners in Asia, North America, and Europe.

Despite having more than 50 VLCCs trapped in the Strait of Hormuz in fiscal Q1 2026, the company still reported YOY revenue growth of nearly 135%.

One point of contention: the dividend is looking increasingly risky at 14.75% with a payout ratio of 124%.

Like many of its VLCCs, DHT shares have been stuck in neutral, trading in a tight range after spiking in the buildup to the war. The stock recently spiked off the low end of this trading range, and signals on the RSI and the Moving Average Convergence Divergence (MACD) indicator show bullish momentum accelerating once again.

The company’s next earnings release is for fiscal Q2 2026 results on Aug. 5, and investors will be eagerly awaiting an update on the condition of the VLCC fleet.